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1. THE DECISION. It was a Sunday evening on the west coast and I knew that the beginning of a new trading week is notorious for trading on low volume. Especially before the UK and NYC sessions. Prior market activity indicated a strong uptrend on the hourly chart. In addition, the day opened with a sharp up-move on the 5 minute chart. By noticing this initial bullish sentiment I thought that if there were a tendency, it were to go long. I usually avoid entering the market in the direction opposite of the trend.

2. ENTRY POINT. I entered this trade during a micro consolidation on the 5 minute chart. The price action was making new higher lows, a sign of bullish strength. Before I entered this trade, it was important to already know where my stop loss and profit targets would be. You can look these up above in the trade description or simply find them on the screenshots. As I entered a long position, the exchange rate immediately rewarded me with 11 pips. I just entered a trade and I was already making a profit. I did not get excited about it. Many amaterus get easily excited when the market makes a small move in their favor. I knew that the market can do anything from that point on...

3. ...Which it did. Again the market rewarded my entry point with another 6 pips. I was already making 17 pips. I know that when trading, we want to be self-disciplined and understand that the market can do anything at any point during the trade. This is why I simply don't get excited about it and wait for the price to reach my first target, which is set in stone. There is absolutely no decision making after a position is entered. All of the decisions must be made prior to placing the trade. Once the trade is live we only want to concerned outselves with the technical execution of the trade. Nothing more.

4. THE FIRST PULLBACK After a 17 pip rally, the price retraces almost exactly back to the entry point. Do we get scared that things are not going our way anymore and exit the trade? No, we keep our stop loss and target positions. Again, these decisions must not enter our mind right now. We must make all decisions before entering the trade. Right now we are simply executing it, and sticking to our strategy.

5. THE PULLBACK CONTINUES, hitting our entry point territory and going over into negative space. Do we panic, close this position for a 10 pip loss? No, we keep our trading setup intact and wait until our exit or target levels are hit, whichever comes first.

6. ENTRY POINT IS TESTED ONCE AGAIN. The price actions continues to test our entry point, and our nerves, too. But because we understand the importance of self-discipline, we do nothing. All decisions have already been made before we entered the trade.

7. ENTRY POINT CONFIRMED. Finally the market once again approves of the entry point - the decision I have made in the first place when this position entered the market.

Eventually the price makes a new micro rally, confirming the quality of the entry point.

8. TRIANGLE FORMATION. This price action formed a triangle that I decided to draw on the chart with the help of Dealbook 360 software. The upper line of that triangle was broken by a new micro rally. Finally, this new rally hits my first profit target for a profit of 16 pips on the first lot. Keep in mind, the second lot is still on the trading table.

Soon as the first profit target was hit, I raised my stop loss from 1.3545 up to the entry point at 1.3561. By doing this, I secured the small profit already gained on the first lot. Now, the worst case scenario for the outcome of this trade is either +16 pip profit on the first lot and break-even on the second lot. Not bad at all, considering that the worst case is a profit.

After the price broke the first triangle, I decided to draw another one above, using the same trend line that I used to draw the first one. Breaking this new horizontal line would indicate that the bulls are becoming stronger.

9. AN UNEXPECTED CONSOLIDATION. The exchange rate started to consolidate right on the upper line of the first triangle for a few minutes, which was the first sign of bull weakness.

Good trades usually occur quickly, and so I began to doubt the strength of this upmove. Besides, the MACD indicator was showing weakness as well. I know that my second target hasn't been hit yet. There would be no mistake holding this trade to see what's going to happen, knowing that the worst case is a profit of 16 pips on the first lot. But I also started to have my doubts about the entire position. While the price cooperated with my initial choice, these new signs of weakness started to become more prominent every time the 5 minute bar closed.

Here I decided to make a decision. If The price reaches the previous resistance level, slightly below the second horizontal line that belonged to the second triangle I drew, I would exit the second lot with an extra profit without getting too excited about the exchange rate moving up because it had shown early signs of weakness and the odds started to turn against me. This became obvious to me by simply looking at the chart and seeing the 5 minute candles close.

10. LAST CHANCE Just a few minutes later, the price rallies in a micro upmove. I decide to exit out of my second lot position with a profit of 15 pips, while it was still offered to me. I know that holding this trade any longer is unrealistic due to prior signals of weakness and this recent upmove was really a bargain.

After manually exiting out of my second lot, I gained another 15 pips. I removed my second profit target position from the chart as it has not been reached.

Sure enough, my observation turned out to be correct, and eventually the price collapsed and retraced as part of the previous uptrend. Implementing the right risk management techniques and making smart decisions, I was out of this trade with a total of 31 pips.

Notice that the amount of risk never topped -7 pips. On this trade, my profit of 31 pips was almost 5 times greater than the potential amount of risk.